European Car Sales in February Offer Hope for a Turnaround
(Bloomberg) -- European car sales declined in February for the sixth straight month, although improvements in some of the biggest markets of Germany, France and the U.K. indicate a turnaround may be on the horizon.
Passenger car registrations dropped 0.9 percent compared to the same month last year, the European Automobile Manufacturers Association said Friday. While German, French and U.K. sales rose for the first time since September, registrations fell a sharp 8.8 percent in Spain, which is preparing for a snap election in April, and 2.4 percent in Italy.
February’s drop is the smallest since September, when sales declined abruptly in the wake of new European rules on testing for emissions. The effects of the changes have lingered into 2019, and nearly caused a technical recession in Germany at the end of last year because of the importance of the car industry to that country’s economy.
Large automakers like Volkswagen AG are reducing costs as trade tensions and the slowdown in sales have squeezed margins. The possibility of a no-deal Brexit is also creating worries about the U.K. automotive market, which depends heavily on imports from the European Union. In the event a deal isn’t reached, the U.K. government said Wednesday finished cars would be subject to tariffs to protect the domestic industry.
The threat of tariffs from the U.S. is also weighing on the companies. Commerce Secretary Wilbur Ross in February submitted a report to President Donald Trump on whether imported cars pose a national-security risk. The administration hasn’t disclosed the findings and Trump has until May to decide what action to take. He has in the past threatened tariffs as high as 25 percent.
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